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July 13, 2006

Battle Over Nielsen Ratings Rages On

A couple of weeks ago, I wrote about the new proposal for Nielsen ratings minute-per-minute that would allow advertisers to see the type of ratings that commercial time gets, as opposed to program time. Some of the television networks requested the change through a demand from their advertisers, who wanted another way to have proof that people were still watching their commercials.

At that time, David Poltrack from CBS demonstrated that he was dubious about the motives from advertisers, who were looking for ways to gets rates lowered, and also cautious of anyone espousing that the percentage of viewers who try to avoid commercials haven't changed in the TiVo and DVR age but rather the technology for avoiding commercials has shifted.

But, while the Nielsen ratings were attacked from one side by the networks even as they were asking for them, they've faced major attack this week from the other side: the media buyers who are placing commercials for advertisers.

In Wednesday's Television Week, Jon Lafayette quotes media buying agency Magna Global as calling the proposed Nielsen measurement system unacceptable as a standard for trading advertising time on. Magna calls instead for a second-by-second measurement system that would give advertisers a true indication of the number of people watching advertisements.

VCR viewers are another source of controversy. The current system would count VCR recordings of shows as views, including the commercials, but Magna argues that statistics say that 1/3 of things recorded on a VCR are never watched (especially by people who pop a tape in to record something coming on later and leave the VCR running for hours). Further, of those who do watch the tape, as many as 2/3 of them skip the commercials.

DVR viewings are another controversial topic, as Magna points out that current proposals would count DVR viewings up to a week after the show airs. For time-sensitive advertisements, such as for a weekend sale or a movie's opening weekend, the time that the viewer watches the commercial is essential to know.

Finally, Magna is angry about the way the minute-by-minute measurement system measures commercials. According to their statements in Lafayette's story, the current Nielsen system would count any minute that had commercial time in it as a commercial minute. Magna's VP points out that such a policy would allow minutes that are almost completely taken up by the program to be counted as a commercial minute, which would artificially inflate the number of viewers.

It's no surprise that people on both sides of the advertiser/broadcaster fence would fall into disarray over this issue, though. After all, the broadcasters aren't too thrilled to be going through this process in the first place, since they've been trying to uphold the status of the 30-second spot. And advertisers have plenty of reasons to be skeptical at what they see as protections built in. It shouldn't surprise anyone to hear Nielsen's policies knocked as not being an accurate reflection of real viewer behaviors, especially since it measures on quantity only and does not know how to handle new technologies at this point.

Lafayette points out that this is really round two of a fight that cropped up a few months ago regarding whether to count DVR viewers in the numbers used to determine advertising rates, and this is an argument that isn't going away anytime soon. And, as long as the industry is struggling to hang on to a system that's becoming more and more outmoded as time goes by, it's no surprise that there's going to be so much tension. The question is just how long people are going to stay on a slowly sinking ship before they decide to try something new.

In all fairness, all the evidence we're reporting here indicates that both advertisers and networks are thinking of all sorts of creative new ways to incorporate advertising and to provide funding for content, from sponsorships to product placement to subscription models for online repurposing of content. But there's still just so much time invested in the traditional 30-second spot, and the whole industry trades on Nielsen numbers.

It'll be interesting to see how debate surrounding these commercial ratings measurements continues throughout the summer in anticipation of this fall and how much these numbers change the way advertising is bought and sold.

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